Chinese developer has a strong debut
Shares of U.S. real estate companies are market pariahs, but shares of a Chinese developer got a warm welcome Wednesday on their first day of trading on Wall Street.
Xinyuan Real Estate Co., which sold 17.5 million shares at $14 each on Tuesday, jumped $2.80, or 20%, to close at $16.80 on the New York Stock Exchange.
The Zhengzhou, China, company, which trades under the ticker symbol XIN, generates most of its revenue from apartment sales in five Chinese cities.
As with many of China’s stock offerings this year, Xinyuan’s business is set to profit from the increasing spending clout of China’s middle class, analysts said.
“The growth of the middle class in China has resulted in significant unmet demand for affordable homes,†said Scott Sweet, managing director of research firm IPO Boutique.
Xinyuan posted net income of $16 million on revenue of $142 million in 2006.
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